First Rental Property

[Luke Perrin]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $327,000
Cash invested: $16,350

New build. 3 bed 2 bath ranch with unfinished basement. House hack - acquired with 5% down as primary residence.

What made you interested in investing in this type of deal?

There was instant equity to be gained and we wanted a new home.

How did you find this deal and how did you negotiate it?

This was a new construction home. I saw signs in my area advertising a new housing development. My wife and I chose the lot and a smaller ranch home to maximize the equity gained. Paid $5k over asking price but asked for $5k closing credit to minimize out-of-pocket cost.

How did you finance this deal?

5% down payment using a local credit union

How did you add value to the deal?

Added fence and backyard landscaping with sprinkler system. Doubled size of concrete patio and added concrete walkway from driveway to back patio. Installed new shower doors in both bathrooms and updated shower heads. Upgraded to LED lighting. Upgraded kitchen sink and faucet. Installed garage hooks for tool storage.

What was the outcome?

Great cash flowing property with increasing equity

Lessons learned? Challenges?

New builds come with their own projects. We thought everything would be perfect when we moved in, but we quickly realized there were tons of little things we needed the builder to complete or fix during the first year. As long as we kept bugging the builder, they were there to take care of the little issues we had. Each project seemed to create more projects.